I own a small apartment block and so I have to know about this stuff to protect my investment. My business wouldn't be nearly as successful and I wouldn't be able to attract desireable tenants if my bathrooms looked like the one pictured above.

Grout (and it helps on some tile as well) sealer is primarily for helping to prevent stains. While it may have a short-term water beading capability, it is not a filler that prevents water from migrating through the surface. A typical glazed tile doesn't benefit, nor does a straight porcelain tile unless it is polished, then the pores are opened up, and it should be sealed as well as the grout. A urethane and epoxy based grout typically does not benefit from sealing, only cement based ones.

Mold behind silicone only means the silicone should have been replaced before the water got behind it. It's not permanent material. Remove the silicone, allow the joint to dry out thoroughly, and then install new silicone.

Grout (and it helps on some tile as well) sealer is primarily for helping to prevent stains. While it may have a short-term water beading capability, it is not a filler that prevents water from migrating through the surface. A typical glazed tile doesn't benefit, nor does a straight porcelain tile unless it is polished, then the pores are opened up, and it should be sealed as well as the grout. A urethane and epoxy based grout typically does not benefit from sealing, only cement based ones.

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I just have Custom's non-sanded in 1/16" joints.

I always had thought sealer was to keep out water. So is it normal and permissible to have water leech in to those joints? It doesn't cause any water damage inside the wall?

A properly built shower isn't damaged by moisture even before the tile is installed. Except maybe in a commercial shower or steamroom, the shower is not typically used more than an hour or two each day, so it has time to dry out. Sealer is primarily designed to help prevent staining, but it does help slow, but not stop, moisture. On a conventional shower pan build, they put weep holes underneath the tile for a reason...gravity helps move any moisture that does get there down the sloped liner and out the drain. ON a wall, it primarily dries to the outside.

The reason I prefer a surface applied membrane is that there is so much less in a shower that can get wet in the first place on both the walls and the pan, so it will dry out much faster than a conventional shower built over materials that can absorb moisture, and, I feel, is a much better solution to a shower that gets heavy use.

A properly built shower isn't damaged by moisture even before the tile is installed. Except maybe in a commercial shower or steamroom, the shower is not typically used more than an hour or two each day, so it has time to dry out. Sealer is primarily designed to help prevent staining, but it does help slow, but not stop, moisture. On a conventional shower pan build, they put weep holes underneath the tile for a reason...gravity helps move any moisture that does get there down the sloped liner and out the drain. ON a wall, it primarily dries to the outside.

The reason I prefer a surface applied membrane is that there is so much less in a shower that can get wet in the first place on both the walls and the pan, so it will dry out much faster than a conventional shower built over materials that can absorb moisture, and, I feel, is a much better solution to a shower that gets heavy use.

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OK, are you saying that any water that gets through the grout will just come back through? Since this 30x30 stall shower is caulked on three sides where the 13" tiles meet the pan, the only "drain" holes are on either side at the front. I was reading on another tile forum that it is recommended to leave gaps in a few places in the caulk to allow for the drainage of any water that gets in. But where and how far apart to make those gaps; maybe at each grout line?

Neither the tile nor the grout is totally waterproof, and therefore, yes, you will get some moisture to penetrate, especially when hit with the shower spray directly. Now, how far in, or how much will depend on how often the shower is used and the type of tile and grout, and the quantity and pressure from the head(s). How quickly the shower dries out can be a factor - the dry desert verses the FL coast, and how well the ventilation is done (often, how long the fan is left on, or if the doors or curtain are left open).

There is no industry standard for your second question. Some like to leave gaps to make it easier for moisture to escape, some ignore that entirely. If the shower is built properly, it won't matter, at least from a damage viewpoint. IF the grout lines are not huge, and the tile is either porcelain or glazed, very little moisture will penetrate, and most often, that that does, evaporates in between uses. It's more of an issue on the pan, and unless you use a surface membrane, the slope of the liner and the operation of the weepholes are the critical things.